There’s been a lot of focus on gold lately as prices continue to set record highs in 2024.
But gold isn’t the only commodity soaring in price. Due to events that have impacted global and domestic supply and demand, a handful of other metals are also increasing in value and challenging all-time highs of their own.
These metals — like silver, copper and aluminum — are flying under the radar while experiencing price surges that might have investors considering opportunities beyond gold.
Why are copper prices rising?
Demand for copper in China and the U.S. is climbing, and because the principal driver is the green energy transition, this appears to be a sustainable long-term trend. Beyond its manifold industrial applications, copper is a critical component in solar panels, wind turbines, EV charging cables and EV charging stations.
According to Kelley Blue Book, 2023 saw a record 1.189 million EVs sold, making electric vehicles the fastest-growing car category by sales. Additionally, U.S. Energy Information Administration data shows that last year, electric generating capacity from renewable sources surpassed both coal and nuclear and should be close to equalling the capacity of natural gas by 2025.
This and ongoing demand for industrial uses like plumbing, electrical grids and home appliances have been driving copper prices higher. The ductile metal is approaching its all-time high set in 2022 and is up 18.42% since hitting its six-month low in October 2023.
As a result, copper-backed equities are rising in tandem. Numerous exchange-traded funds (ETFs) leveraged to the metal — like the Global X Copper Miners ETF (COPX), which has gained 22.44% so far this year — are significantly outperforming the ’s year-to-date gain of 6.24%.
Silver’s no longer taking a backseat to gold
Despite gold setting its all-time high in April, over the past month the yellow metal has been outgained by silver 9.76% to 15.10%. Silver remains nearly 40% below its all-time high, but it’s currently trading at its highest prices since the first quarter of 2013.
Demand for the metal continues to outpace supply, as silver and its alloys are integral to the manufacture of batteries, LED chips, medicine, nuclear reactors, solar panels, semiconductors and touchscreens. According to The Silver Institute, demand is expected to reach 1.2 billion ounces this year, which would mark the second highest level on record.
Like gold, silver is seen as a safe-haven asset that performs well during periods of geopolitical unrest. With tensions worsening in the Middle East and no end in sight for the war between Ukraine and Russia, the price of silver — which has increased 31.22% since Hamas attacked Israel last October — should remain elevated.
Silver-backed ETFs are correspondingly on the rise. The iShares Silver Trust (SLV), for example, has seen a 21.87% gain in 2024.
New sanctions on Russia propel aluminum prices
Aluminum futures were recently trading at their highest levels since June 2022 on the backs of new economic sanctions by the U.S. and U.K. against Russia, the world’s third-largest producer of the metal. With the global supply tightened, the price of aluminum is currently trading well above its one-year high.
Though it’s unlikely to challenge its all-time high set in March 2022, aluminum is up 11.88% over the past month and likely to continue climbing as demand for the lightweight, durable and corrosion-resistant metal increases. According to the World Economic Forum, demand is expected to increase by almost 40% by 2030 as “transportation, construction, packaging and the electrical sectors will drive demand and account for 75% of the total metal required.”
The rise for aluminum equities is similar to that of copper and silver, with major companies like Century Aluminum (CENX), Kaiser Aluminum (KALU) and Alcoa (AA) up 48.91%, 26.36% and 9.79%, respectively, this year.
Other metals tagging along — and how to invest safely
Copper, silver and aluminum aren’t the only metals upstaging gold in 2024. Tin prices are being bolstered by outbreaks of violence in areas critically important to the mining of its ore in the Democratic Republic of the Congo and Rwanda. Prices of the pliable metal have shot up 15.28% over the past month.
Zinc is also joining the rally. China — the world’s largest zinc consumer — recently saw its factory activity expand at the fastest pace in over a year, with similar trends developing in the U.S. and Germany. As a result, zinc prices have appreciated 9.68% over the past month.
While base and precious metals are currently surging in price lately, short-term trends shouldn’t dictate your investment strategies. For example, the aforementioned aluminum producer, Alcoa, saw its stock soar to an all-time high in the first quarter of 2022 amid ongoing supply chain issues. But investors who waited for the rally to invest saw their shares fall sharply over the following six months, with prices dropping around 63%.
A safer approach to diversifying a portfolio with exposure to metals would be choosing an ETF that’s focused on a metal that isn’t being propelled solely by short-term drivers. ETFs provide broad industry exposure by allocating funds across a basket of stocks, and this approach can be undergirded by choosing an ETF focused on a metal with long-term tailwinds.
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